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ECONOMY
MONGOLIA-CHINA SHIVEE KHUREN-CEKE RAILWAY STARTS CONSTRUCTION, BENEFITING COAL EXPORTS
Mongolia has started construction of a 7.1-km railway linking Shivee Khuren and China's Ceke border port, which is likely to boost bilateral coal trades through the artery after it completes construction by late October, Mongolian media reported.
Shivee Khuren port handles 48% of the fuel exports to China, and construction of the railway project is expected to take 6 months, Mongolia's Prime Minister, Luvsannamsrai Oyun-Erdene said during his atendence in the groundbreaking ceremony.
Oyun-Erdene emphasized the strategic significance of connecting the Shivee Khuren with Ceke via the railway, as it marks the beginning of the west trans-border railway, a part of the China-Russia-Mongolia economic corridor.
With the completion of the cross-border railway, the port's export clearance capacity of cargoes is expected to double to reach up to 20 million tonnes, which will help to improve efficiency and reduce transportation costs.
Source: sxcoal.com, Mining Insight, RailFreight.com, Montsame
See also: China's Ganqimaodu's Mongolian coal imports exceed 12 Mt
China's Erenhot coal imports climb 117.5% YoY in Jan-Apr
MONGOLIA TO COMMENCE ITS FIRST OIL PRODUCTION IN 2026
On April 28, 2023, a significant event took place with the inauguration of the main technological and mechanical assembly of the Mongolian oil refinery's pipelines. This event marked a major milestone for the oil industry, as it brought together three key players - Mongolia, India, and China - to collaborate as a team. While there is a sense of friendly competition among them to drive development forward, their partnership underscores a shared commitment to advancing the oil industry collaboratively and sustainably. The opening ceremony commenced with D.Altantsetseg, the Executive Director of the Mongolian Oil Refinery, who started by greeting and shaking hands with the Mongolian, Indian, and Chinese workers and representatives who had contributed to the construction of the oil refinery.
In his opening remarks, he expressed his gratitude to the Government of BNR for their unwavering support of the project from its inception. We express our gratitude to Megha Engineering Limited and Norinco International Cooperation, both of China, for their continuous involvement in the construction of the Oil refinery.
Source: Mining Insight
MONGOLIA MAKING ACHINGLY SLOW PROGRESS IN RARE EARTH ELEMENTS INSIDERS SAY
Rare earth element (REE) resources in Mongolia are viewed by some observers as potentially very much part of the solution when it comes to countering China's global monopoly on these critical minerals. However, the likelihood of Mongolia becoming a major REE producer any time soon seems rather low due to several obstacles.
The most significant is the lack of proper policy and legislation to accommodate REE mining.
In a survey conducted in 2009, Mongolia's REE deposits were estimated as equivalent to 16.8% of known REE reserves worldwide, but the data was based on a general survey of all minerals rather than REE specifically. “It was an estimate because it was based on a general survey of all minerals, rather than a specific rare earth survey, but no other survey has been made on REE in the country,” said Dagva Myagmarsuren, a mining consultant at Qualified Management Consultants.
Source: bne IntelliNews
GOVERMENT PAYS SPECIAL ATTENTION ON REVIVAL OF INDUSTRIALIZATION
By the initiative of Prime Minister L. Oyun-Erdene, the National Conference on Industrialization has taken place today in the State Palace.
One of the key goals of the Government's "New Revival Policy" is "Revival of Industrialization." The main purpose of the Conference is to provide concrete solutions on a large scale for enhancing the utilization of energy and infrastructure potential and coordination of public and private sectors, which are crucial for the sector’s investment, legal environment, and the recovery of industrialization. Approximately 1000 domestic and foreign representatives are participating in the conference, which is co-organized by the National Industrialization Committee, Ministry of Mining and Heavy Industry, National Mining Association, and "Erdenes Mongol" Association.
Prime Minister L. Oyun-Erdene underlined that the significance of this Conference is to determine the solutions to increase the export of mining products, which is a backbone of the country’s economy, and diversify the economy.
Source: Montsame
POLITICS
MONGOLIA RAISES THE NUMBER OF MPS TO 126
Mongolia will hold its parliamentary elections in spring of 2024.
At an irregular session 31 May, the parliament approved amendments to the country’s Constitution, which increased the number of MPs from 76 to 126.
According to the amendments, the parliament remains unicameral, but with 126 members, which is 50 more than the previous one.
Parliamentary elections will be held under a mixed electoral system. 78 members will be elected by majoritarian system or from constituencies, and 48 members by proportional system or party list.
Source: News.mn, Montsame
See also: Empowering the people: MEPs hear about constitutional transformation in Kazakhstan and Mongolia
KYRGYZ FOREIGN MINISTER PAYS OFFICIAL VISIT TO MONGOLIA
Minister of Foreign Affairs of the Kyrgyz Republic Zh.Kulubaev is currently paying an official visit to Mongolia, commencing on May 29 at the invitation by Minister of Foreign Affairs of Mongolia (MFA) B. Battsetseg.
Minister Zh.Kulubaev arrived at the Chingis Khaan International Airport, where he received a warm welcome from the Acting State Secretary and Director General of the Department of Public Administration and Management of MFA, S. Zoljargal and Ambassador Extraordinary and Plenipotentiary of Mongolia to the Kyrgyz Republic S. Ganhuyag, and other dignitaries.
The visit by Minister Zh.Kulubaev holds great significance as it marks a decade since the last visit by the Minister of Foreign Affairs of Kyrgyzstan to Mongolia. During the visit, Zh.Kulubaev will pay a courtesy call to the President of Mongolia Khurelsukh Ukhnaa, and the Foreign Ministers will hold official talks.
Source: Montsame
See also: Mongolian and Kyrgyz Banks to Cooperate in Digital Transition
President Receives Kyrgyz Foreign Minister
Foreign Minister Holds Official Talks with Her Kyrgyz Counterpart
GOVERNMENT FUNDS’ INFORMATION MADE OPEN
Today, Minister of Digital Development and Communications N. Uchral briefed the press on the Government funds of which information is made available on shilen.gov.mn under the Government’s Five W Campaign against corruption.
According to the Minister's presentation, all information on the Government Funds for Environment and Climate, Science and Technology, Crime Victim Compensation, Film Art, and Aid for Citizens Abroad has been fully uploaded to and updated on the website. In addition, information on the other four Government Funds, namely the Public Service Fund, Health Insurance Fund, Budget Stabilization Fund, and the Government's Reserve Fund, will be uploaded to the site for public access next week.
Minister of Digital Development and Communications N. Uchral said, "The Government provides over 25 funding schemes, but it should be noted that not all of them are funded by the Government. Indeed, we do need these funds. Most importantly, the target groups of the funds must be reached and benefit from them…
Source: Montsame
THE RENEWED FRIENDSHIP BETWEEN BISHKEK AND ULAN BATOR
After ten years without meeting, also due to ancient and recent grudges that have never been completely put to rest, the foreign minister of Kyrgyzstan, Zheenbek Kulubaev, met with his counterpart from Mongolia, Batsetseg Batmonkh, to officially discuss joint projects between the two countries, where the Turkish-Mongolian souls of Central Asia meet, as reported by the Middle Asian News agency.
The talks took place in a very friendly and fruitful atmosphere, in which the parties assessed the current conditions of Mongolian-Kyrgyz relations and looked for ways to revive cooperation at the national and regional level.
Batsetseg emphasised that, albeit in alternating phases, relations have developed very positively over the past 30 years since the end of the USSR, between two landlocked countries with different peoples, divided by the Chinese corridor of Xinjiang Uyghur.
Kulubaev expressed his thanks for the warm welcome, saying he was happy to finally be able to make this visit to a 'brother people' of the Kyrgyz.
Source: AsiaNews.it
FIRST TRIPARTITE MEETING OF MONGOLIA, REPUBLIC OF KOREA AND USA HELD
The first tripartite meeting between Mongolia, the Republic of Korea, and the United States was held in Ulaanbaatar on May 30.
The Mongolian side was led by Director of the Policy and Planning Department of the Ministry of Foreign Affairs G. Byambasuren, representatives of the Republic of Korea – by Director of the Department of Northeast Asia of the Ministry of Foreign Affairs Choi Yong jun, and the US representatives – by Assistant Secretary of the Department of State Mark Lambert.
At the first meeting, the parties exchanged views on a wide range of regional and international security issues of mutual interest and agreed to cooperate in the fields of transport and logistics networks, energy, mineral resources, food security, climate change, and development cooperation.
The parties agreed to organize the tripartite meeting on a regular basis further and issued a joint statement.
Source: Montsame, Yonhap News
DEVELOPMENT BANK RAISES USD 75 MILLION BY ISSUING PRIVATE BONDS
In accordance with the Resolution No. 22 of April 24, 2023 of the Board of Directors of the Development Bank of Mongolia, capital equal to USD 75.0 million has been raised from foreign investors by issuing private bonds in OTC market. On May 12 of this year, an agreement was signed with "Mopane Securities" LLC, registered in London, and the aforementioned capital has been raised.
It was informed that investment without risks associated with foreign currency rate, i.e. issuing securities in MNT provides an opportunity to diversify the resources of the Development Bank and protect against the risk of foreign exchange rate fluctuations.
Out of USD 500 million “DBM 2023” bond USD 99.7 million was redeemed.
In 2018, the Development Bank of Mongolia issued USD 500.0 million worth "Euro" bonds or "DBM 2023" bonds with 7.25 percent interest rate to the international market independently without government guarantees. The bond is listed on the Singapore Stock Exchange and is publicly traded in international markets.
Source: Montsame
MACRON IN MONGOLIA – VALUABLE METAL AND A “ONE-MAN THEATER”? - EDITORIAL
On May 21, 2023, the first official visit of the President of France to Mongolia in the almost sixty-year history of relations between the two countries took place. The visit was accompanied by a number of “rituals of respect” – in particular, a solemn ceremony in the main square of Ulaanbaatar, as well as a trip by the French leader to the Genghis Khan Museum. At the end of the visit, a joint declaration was presented and the desire of the countries to achieve the level of “comprehensive strategic partnership” in bilateral relations was expressed.
Such “surprises” occur in Mongolian practice more and more often – as Jarantai Myadagbadam notes, in recent years the number of foreign visits to Mongolia of the highest and high levels has increased up to four times – primarily due to the so-called “third neighbors” of Mongolia – the developed countries of the West. Since the beginning of the year, the US Secretary of State and the President of Poland have visited the country, and the President of Mongolia had a telephone conversation with the President of Ukraine.
Source: New Eastern Outlook
MONGOLIA’S PAPER FLEET IS HELPING RUSSIA DODGE SANCTIONS - EDITORIAL
Mongolia is the world’s second-largest landlocked country. On paper, though, it sails more than 3,000 ships. The North Asian country has established a shipping registry that, like other nations taking advantage of shipping’s sketchy rules, has become a preferred choice for a dubious clientele of shipowners.
he decades after the 1920s—when some U.S. companies began reflagging their ships to Panama to be able to serve passengers alcohol—saw decidedly modest maritime powers such as Panama, Liberia, and the Marshall Islands establish the concept of “flag of convenience,” as they allowed shipping companies from any country to register their vessels under their flags. The flag-of-convenience states made money, and the shipping companies could circumvent their own countries’ pesky rules and regulations. Today, Panama, Liberia, and the Marshall Islands are the world’s top three shipping countries measured by dead-weight tonnage.
Now Mongolia is gaining clients—especially shipping companies transporting sanctioned Russian goods.
Source: Foreign Policy
AMBASSADOR OF MONGOLIA LAUNCHED GTTCI – MONGOLIA FORUM - VIDEO
Mr. Dambajavyn Ganbold, Ambassador of Mongolia while inaugurating GTTC India – Mongolia Forum Saud that he is very happy to inaugurate that forum. He said that objectives of this important forum is very clear. They want to bring India – Mongolia closer, the people of two countries come much more closer based on that to bring opportunities and access to each other in buisness and other activities.
His excellency told TEN NEWS that they would like to start a Mongolian business newspaper in India and also Indian newspaper in Mongolia, it is mutually beneficial for two countries.
Ambassador of Mongolia also released the book ‘RIch History and Cultural of Mongolia’ writern by Gaurav Gupta. he said that there are lot of books about Mongolia but this book will translated into Hindi and will be distributed to more people which help the Indian people to know about the broader aspects of Mongolia.
Source: TenNews.in
See also: Bharat Express Chairman Upendrra Rai Attends The Launch Of GTTC India Mongolia Forum
BALANCING POLICY REFORMS FOR SUSTAINABLE JOB CREATION - EDITORIAL
Mongolia faces significant challenges in its labor market, including an aging population, low workforce participation, high unemployment rates, and low labor productivity. Recently, the Prime Minister met with private employers to discuss labor force issues and wage policies. As Mongolia seeks solutions, striking a balance between policy reforms and sustainable job creation becomes crucial.
Mongolia's heavy reliance on the public sector, where 22% of the employed population works, is unsustainable.
To address this, the government aims to outsource work to the private sector, reducing the burden on the government while creating job growth opportunities. However, concerns raised by private sector representatives regarding social insurance payment burdens and skill shortages must be considered.
Private sector representatives highlight the tax burden on employers and the scarcity of job-ready skilled workers. They fear that wage increases for public sector employees may disrupt the private sector's competitiveness.
Source: Mongolia Weekly
MONGOLIA EMBROILED IN A MAJOR CORRUPTION SCANDAL OVER THE ALLOCATION OF EDUCATIONAL LOANS - INTERVIEW
After facing the nation’s biggest corruption scandal in January 2023, the Mongolian government has its hands full with another major corruption case. The country’s media space blew up on May 16 with the report on systemic corruption surrounding the State Educational Loan Fund. Based on the audit data in the report, the fund has been ridden with violations and corruption since 1997, when it started issuing loans to students pursuing higher education abroad. The list of all loan recipients, including their names and remaining loan amounts, was published on May 22, further exposing the scale of corruption and mounting pressure to pay back the loans.
Independent investigation illustrates lack of transparency and competition in the allocation of loans. Global Voices spoke to Batnairambal Otgonshar, who was the first one to bring this case to the public’s attention, to learn about the State Educational Loan Fund and the corruption surrounding it. Batnairamdal is a former Deputy Minister of Mining and Heavy Industry of Mongolia and the International Secretary of the ruling Mongolian People’s Party.
Source: Global Voices
MORE PRIDE AND LESS PREJUDICE - EDITORIAL
Just as in other countries across the globe, being a member of the LGBTQI+ community in Mongolia can still expose one to harassment and physical assault. But the last few years has seen a seeming softening among many Mongolians — particularly the youth — toward LGBTQI+ people.
For instance, a 2021 study conducted by the private marketing research company Axon Neurolab found that 85.5 percent of Mongolian university students were not opposed to same-sex marriage, indicating a growing trend toward acceptance and tolerance of diverse sexual orientations and gender identities in the country. A 2019 baseline study by the United Nations Development Programme (UNDP) on gender equality in public administration also showed that public administrators’ understanding of gender rights had significantly increased, and gender rights, which were once seen as pertaining to women’s rights, have shifted to a broader scope.
Source: Asia Democracy Chronicles
BUSINESS
XACBANK GOES PUBLIC
XacBank IPO, one of Mongolia's top 5 banks, is set to begin this week. Here are some key insights.
Must Knows
- Valuation: XacBank aims to raise ₮37.5 billion by offering 5.01% of its shares to the public at ₮677 per unit. As a result, the bank will get valued at ₮712.7 billion after the IPO.
- Allocation: The bank plans to allocate 70% of its IPO shares to strategic investors and the remaining 30% to the general public.
- Subscription Period: May 29th - June 5th.
What sets apart XacBank?
- High ROE: XacBank 's return on equity (ROE) for the previous year stood at 27.6%, surpassing the average of the Top 5 banks. Furthermore, the bank's total assets have grown by 13.4% over the past year, reaching ₮4 trillion.
- Low NPL: XacBank boasts the lowest percentage of non-performing loans (NPL) among systematically important banks, with NPL standing at 4%.
- Low ownership concentration: …
Source: Inside Mongolia
See also: XacBank, the first green bank in Mongolia
VALUE-ADDED TAX IN MONGOLIA
Our Mongolian lawyers have recently been assisting a company to register as a withholding Value-Added Tax payer in Mongolia. This post contains the questions that have arisen during that process, along with my answer.
A VAT withholding taxpayer may be an individual, legal entity or representative of foreign legal entity whose sale amount of goods, work or services in Mongolia has reached 50 million MNT or more. They obliged to withhold value added tax and pay to the government under the Mongolian VAT law. Whereas, the VAT payer is the last user, ultimately accountable for the VAT cost. If an individual or entity determined as a withholding tax payer, registration must be submitted to the relevant tax office within 10 working days of exceeding the amount of sale, and the tax authority will issue a VAT certificate to the individual or entity confirming its registration within 3 working days.
Source: LehmanLaw Mongolia
HOW A MONGOLIAN COMPANY IS PROVIDING JOBS AND HOPE FOR PEOPLE WITH DISABILITIES
- Despite the passage of the Mongolian Law on the Rights of Persons with Disabilities in 2016, a large percentage of people with disabilities have yet to find their place in the Mongolian workforce.
- Following a $15-million financing in 2020 to Mongolia's Ulaanbaatar Flour and Tavan Bogd Foods to help their operations during the pandemic, ADB provided an $18 million loan for the Tavan Bogd COVID-19 Food Security and Inclusive Job Creation Project.
- ADB's funding not only helps ensure a stable supply of wheat flour and mitigate disruptions to the food supply chain in Mongolia, but also helps create a more disability and gender-inclusive workforce.
Employment opportunities for people with disabilities are limited in Mongolia, as they are in many countries. In this landlocked country of 3.4 million people, 42% of households with people with disabilities live in poverty, compared with 18% of households with persons without disabilities. Despite the Mongolian Law on the Rights of Persons with Disabilities that came into effect in 2016, employees with disabilities are not common in the Mongolian workforce.
Source: ADB
DOMESTIC FLIGHTS TO GET UP TO 70 PCT CHEAPER
MIAT, Mongolia’s state-owned flagship airline, has said it will restart regular domestic flights to destinations such as Choibalsan, Dalanzadgad, Murun, and Khovd from July. The government hopes the move will slash ticket prices to those places by up to 70%, boosting tourism and economic activity.
Hunnu Air and Aero Mongolia are the only two of the country’s 11 airlines that offer regular domestic flights, but the prices are prohibitive. A flight from Ulaanbaatar to Ulgii, the westernmost city home to ethnic Kazakhs, costs ₮1.6 million ($460), comparable to flights to Tokyo and Seoul.
Mongolia’s rural regions have long suffered from a vicious circle of poor connectivity and low economic activity. Aside from flights, they are only reachable by the country’s notorious road network which often breaks down and takes up to 36 hours.
As part of its efforts to boost tourism, the Mongolian government has implemented several initiatives to reform its air transport industry…
Source: Inside Mongolia
SCOOTER RENTAL SERVICE LAUNCHES IN UB
et Sharing Mongolia LLC introduced a scooter rental service in the capital city. A total of 3,000 scooters were planned to be placed on the streets and squares of Ulaanbaatar, and 700 of them are released on a trial basis. The project implementers will deploy all the scooters after understanding the demand and organizational structure.
The “Ninebot” model scooter, which allows the citizens of Ulaanbaatar to change their ride, is connected to a smart system or a special application and it also has a locator. To operate the scooter, the user must install the “Jet Scooter” application on their phone and create an account. After that, it will be possible to start the journey by loading the wallet with at least 4,000 MNT and scanning the QR code on the steering wheel. The first minute of renting a scooter is 500 MNT, and the second minute is 200 MNT. Specifically, a user who recharges the wallet with 4,000 MNT can ride a scooter for 18 minutes.
Source: The UB Post
TMK ENERGY AND TALON ENERGY COMPLETE DRILLING AT LUCKY FOX-3, MONGOLIA
- TMK Energy (TMK) finishes up drilling at the Lucky Fox-3 well, completing the drilling phase at its Gurvantes XXXV CSG project in Mongolia
- The final well intersected 68 metres of gassy coal, marking the thickest intersection of the three pilot production wells
- The major drilling rig is being removed from the site as TMK prepares to install pumps and surface facilities for the commencement of production testing in July
- After that, the wells will be commissioned, and then the dewatering process will begin, with the first gas breakthrough aimed for within one or two months after the wells are placed on pump
- TMK shares are up 7.14 per cent and trading at 1.5 cents at 3:30 pm AEST, while shares in TPD are down 3.03 per cent and trading at 16 cents at the same time
Source: The Market Herald
See also: Talon Energy's partner wraps up pilot well drilling at Mongolian project safely, on time and on budget
MONTHLY VOLUME-WEIGHTED AVERAGE PRICE OF COAL WILL BE CALCULATED AND RELEASED TO THE PUBLIC
According to order No. A/79 of the CEO of the Mongolian Stock Exchange, dated May 23, 2023, the volume-weighted average price of each type of coal traded on the Mongolian Stock Exchange will be calculated on the last day of the month, and the information is available to the public through the COAL TRADE menu on the main website of the Mongolian Stock Exchange.
Please click here to view the monthly VWAP for coal.
Source: MSE
PETRO MATAD – CHASING THE MONGOLIAN RAPTORS
The countdown has started as Petro Matad recently announced that it the rig for the drilling of its Velociraptor-1 exploration well is just days away from being onsite.
Investors are still excited that the £74.5m capitalised Petro Matad, which is focussed on oil exploration, development and production in Mongolia, could still be sharing very good news within the next two months.
At the current time, the Isle-of-Man based Petro Matad holds a 100% working interest and the operatorship of two Production Sharing Contracts with the Government of Mongolia.
The country’s leading explorer has 100% interests in production sharing contract blocks, including Ongi Block V that covers an area of approximately 7,937 sq kms; and Matad Block XX that consists of an area of approximately 218 sq kms in Mongolia.
Block XX is in the far eastern part of the country and Block V is in the central western part of the country.
Source: MasterInvestor.co.uk
WE WILL DOUBLE OUR PRODUCTION - STEPPE GOLD'S ANEEL WARAICH ON MINER'S NEXT STEPS - VIDEO
Steppe Gold has a lot of room to grow, said Aneel Waraich, executive vice president and director.
Waraich spoke to Kitco in mid-May.
Steppe Gold describes itself as Mongolia’s premier precious metals company.
Steppe commenced production in 2020 from the ATO Gold Mine, Phase 1 oxide zone, comprising 160k oz Au. The company recently updated its ATO Phase 2 expansion project to approximately 103,000 ounces of gold per annum, with a 12 year mine life, for a total of 14 years to 2036 at all-in-sustaining cost of $850.
"So we will essentially more than double our production profile from 2023 to 2025," said Waraich. "In 2025 onwards will produce over 100,000 ounces per year at an industry-leading cost of $850 to $900 all in cost."
"That's more than our market cap...so a lot of growth opportunity. We think that the 12-year mine life will significantly grow as we continue to drill these deposits."
Source: Steppe Gold
WHY SHOULD BUSINESSES RESPECT HUMAN RIGHTS? - EDITORIAL
A respect for human rights is not just a moral obligation, but also a fundamental necessity for any business that seeks to operate in a just, inclusive, and sustainable environment.
Businesses’ failure to respect and prioritize human rights in their operations could result in many adverse impacts on their employees, customers, and community.
For instance, the near absence and lack of standard ramps has become a widespread human rights issue in Mongolia affecting various group of people including persons with disabilities despite the existence of building standards for construction companies.
Businesses’ failure to pay their employees on time or not at all and injuries or even loss of lives caused by not complying with the proper safety standards are also serious violations of human rights.
These are just some examples of how business operations could infringe on human rights or worse abuse it despite their critical roles and contribution to development of the country and creation of jobs.
Source: UNDP
GLOBAL AND REGIONAL NEWS
ASIA'S SEABORNE THERMAL COAL IMPORTS HIT RECORD HIGH AS PRICES SLIP
Asia's imports of seaborne thermal coal surged to the highest on record in May as cheaper prices tempted buyers in the region's developing economies.
A total of 78.38 million tonnes of the fuel used primarily to generate electricity is likely to be offloaded across Asia in May, according to data compiled by commodity analysts Kpler.
This is the most in Kpler data going back to January 2017, while Refinitiv data also shows record imports in May in data stretching back to January 2015.
The robust May outcome comes on the back of strength in both March and April, with those two months being the second- and third-strongest months according to Kpler data.
Rising thermal coal imports come as seaborne prices for the fuel continue to decline, with two of the more popular grades slipping to 16-month lows in the week to May 26.
Source: Reuters
TRIO OF CRITICAL SIGNS POINT TO GLOBAL ECONOMIC SLOWDOWN
Three leading indicators, namely lower copper prices, the inverted U.S. yield curve and depressed shipping rates, have converged to warn of a slowdown in global economic growth.
The price of copper has recently fallen around 20% from this year's peak, according to an index based on three-month futures traded on the London Metal Exchange. Zinc similarly plunged 30% or so, and aluminum by about 20%.
Copper is used in a wide range of sectors, such as infrastructure, automobiles and consumer electronics. So movements in its price usually predict the overall health of the economy, giving the metal the nickname "Dr. Copper."
The slide in copper prices indicates concern over economic stagnation in China, which accounts for 60% or so of global copper demand. China consumes the metal primarily for copper wire in construction.
Chinese investment in real estate development fell 6.2% on the year for the January-April period.
Source: Nikkei Asia
BRITISH CONSORTIUM TO INVEST USD 9 BILLION IN INDONESIA MINING, EV BATTERIES, MINISTER SAYS
A British consortium that includes mining giant Glencore will invest about $9 billion in Indonesia's mining and electric vehicle (EV) battery sectors, a minister said on Wednesday, as the resource-rich country tries to lure a host of multinational firms.
Indonesia, which has the world's biggest nickel reserves, is keen to develop downstream industries with the ultimate aim of producing batteries and vehicles for the world's biggest electric car manufacturers.
Investment Minister Bahlil Lahadalia did not provide a breakdown of the $9 billion but said it would go into an industrial park in the Bantaeng region on Sulawesi island powered by wind energy, with a completion target of September.
The ministry confirmed the British consortium included firms such as Glencore, Indonesian state miner Aneka Tambang, materials company Umicore and energy company Envision Group.
"The investment is about $9 billion if it is according to plans. If we can speed it up we'll do it," Bahlil told reporters.
Source: Reuters
INDIA’S GDP EXPANDED 6.1 PCT IN 2022-23’S LAST QUARTER
India’s GDP growth accelerated to 6.1% in the January to March 2023 quarter, lifting the economy’s uptick in 2022-23 to 7.2% from the 7% estimated earlier, according to the provisional national income data released by the National Statistical Office (NSO) on Wednesday. The Gross Value Added (GVA) in the economy is reckoned to have risen 7% in 2022-23, compared to 8.8% in 2021-22, with manufacturing GVA growth sliding to just 1.3% from 11.1% a year ago, despite a 4.5% rebound in the final quarter after six months of contraction. Economists noted that though several sectors delivered a positive surprise, especially in the last quarter of the year, consumption remained tepid and the overall growth pattern remains uneven. The farm and services sector buoyed economic outcomes as just three of eight broad economic activity segments recorded a higher GVA growth than in 2021-22. Source: The Hindu
JAPAN'S Q1 GDP GROWTH SEEN REVISED UP ON STRONG CAPEX
Japan's economy likely grew more than initially estimated in the first three months of this year, thanks to solid investments by manufacturers, a Reuters poll showed. Revised real gross domestic product (GDP) data is expected to show the world's third-largest economy expanded at an annualised rate of 1.9% in the first quarter, higher than a preliminary reading of 1.6%, according to the poll of 18 economists. A forecast 1.3% increase in capital expenditure, larger than the provisional estimate for a 0.9% rise, would be the main driver of upgrade, analysts said. Ministry of Finance data on Thursday showed Japanese firms ramped up spending on plant and equipment in January-March at the fastest rate since 2015. "Manufacturers' investments are growing vigorously on top of non-manufacturers' spending, suggesting that the global manufacturing downturn has not brought big impacts to Japan," SMBC Nikko Securities analysts wrote in a note. Source: Reuters
OPEC+ UNLIKELY TO DEEPEN OIL SUPPLY CUTS AT JUNE 4 MEETING, SOURCES SAY
OPEC and its allies are unlikely to deepen supply cuts at their ministerial meeting on Sunday despite a fall in oil prices toward $70 per barrel, four sources from the alliance told Reuters.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40% of the world's crude and supplies around 60% of the oil export market, meaning its policy decisions can have a major price impact.
As the economic outlook worsened, several members of OPEC+ in April pledged voluntary cuts starting from May and to continue to the end of the year.
This was in addition to a 2 million barrels per day (bpd) cut agreed in early October to output targets versus an August 2022 production baseline. It brought total output cuts to 3.66 million bpd, or about 4% of global consumption.
Source: Reuters
GLOBAL FACTORIES STRUGGLE FOR MOMENTUM AMID PATCHY DEMAND
Sluggish global demand deepened the decline in manufacturing activity across Europe and the United States and remained a major challenge for many of Asia's big exporters, business surveys for May showed on Thursday. Purchasing managers' indexes (PMIs) for the euro zone moved further below breakeven despite factories cutting prices for the first time since September 2020. In Britain, output fell for a third month in a row and new orders declined at the fastest pace in four. In the U.S., manufacturing contracted for a seventh straight month as new orders continued to plummet amid higher interest rates, but factories boosted employment to a nine-month high. And while PMIs from China and Japan showed swings in factory activity to growth last month, they stood in contrast to weak indicators from South Korea, Vietnam and Taiwan, where declines continued. Source: Reuters
ESG INVESTORS PUSH INTERNATIONAL FIRMS TO RETHINK MYANMAR PROJECTS
Pressure from investors concerned about environmental, social and corporate governance (ESG) issues, coupled with U.S. and European Union sanctions, is encouraging international companies to pull their cash out of Myanmar.
Indian conglomerate Adani Group announced the sale of a port project underway in Myanmar for just $30 million after critics said money from the project had been diverted to companies affiliated with Myanmar's military, which ousted the country's elected government in February 2021.
The project, undertaken by Adani Ports and Special Economic Zone, an Adani Group company, entails building a container terminal in Yangon, the country's commercial capital.
Promising to invest $290 million, the company obtained approval for the project from the Myanmar Investment Commission in April 2019, when Aung San Suu Kyi's National League for Democracy was governing the country.
Although the project is entirely private, the Indian government has been keeping a close eye on it as a counterbalance to China's infrastructure development in Myanmar.
Source: Nikkei Asia
HOW TAIWAN BECAME THE INDISPENSABLE ECONOMY - EDITORIAL
In the days after then US House Speaker Nancy Pelosi visited Taiwan last year, Taiwanese suppliers to American tech giants including Apple, Google, Meta and Amazon were inundated with requests from their customers. Could they produce from outside Taiwan to secure supplies, in case Beijing went to war over the island?
Pelosi’s visit had sparked more than a diplomatic spat between Washington and Beijing, which conducted unprecedented military exercises around Taiwan in response to her trip. It triggered a tech industry crisis, which may now threaten the global electronics supply chain.
“If anyone hits Taiwan, or there is a serious disruption . . . the tech and electronics industry worldwide is basically screwed,” says Hsieh Yong-fen, founder of chip and material testing provider MA-tek.
Taiwan is best known for making cutting-edge semiconductors. But its companies also turn out other crucial components from printed circuit boards to advanced camera lenses and they run huge device assembly operations in China.
Source: Financial Times
BCM QUARTERLY REPORT, Q1 2023
The Business Council of Mongolia delivers you its First Edition of the BCM Quarterly Report of 2023. The first edition covers all events organised by the BCM through the months of January - March. The fuller version of the articles can be found in the highlighted "details" part on the report.
PDF: 2023 First Quarterly Report
Source: BCM
THE BCM APPOINTS RAPHAËL GOUÉ AS OFFICIAL BCM REPRESENTATIVE IN EUROPE
The Business Council of Mongolia is pleased to announce Mr. Raphaël Goué as an official BCM Representative in Europe.
Raphaël Goué is an expert in energy and banking, having spent more than 12 years in Asia as well as being involved in Europe-Asia cross-border projects since the mid-90s, with a focus on financial services, energy and telecommunications.
Mr. Goué has a wealth of experience in supporting global financial institutions and energy companies in their strategies in Asia, as well their development and M&A. He has previously held various positions in organizations such as Société Générale, Vivendi Universal, Booz & Co and Capital One in Europe, Africa and Asia. As a senior advisor of the global retail banking association EFMA, Raphaël has been supporting the development of banking’s leading association in selected Asian markets, and supporting EFMA in the fintech sector in Europe.
He holds an engineering degree from the École Nationale Supérieure de Géologie in Nancy, France, a master in material science from École de Mines de Nancy, and a MBA from HEC (Paris) he finalized at the Columbia Business School (New York).
The BCM is looking forward to expanding its reach to Europe with Mr. Goué’s leadership and assistance.
UNICEF: GUIDANCE FOR EMPLOYERS ON FLEXIBLE WORK ARRANGEMENTS AND OTHER GOOD WORKPLACE PRACTICES IN THE CONTEXT OF COVID-19
A family friendly workplace or employer is one whose policies and practices make it possible for employees and/or workers to more easily achieving work-life balance, and to fulfil both their work and family obligations. These policies may include, but are not limited to, childcare, breastfeeding rooms, flexible work arrangements, paid leave, safe transport, parenting education and so on. In Mongolia and various other countries, authorities have enforced kindergarten- and school closure policies as part of the preparedness and response to contain the COVID-19 epidemic. In addition to the impacts on children’s education, there are concerns about children’s protection and well-being as children are left alone or without adequate care as many parents still need to go to work. COVID-19 may also have negative effects on mental health and wellbeing of patients (if any), caregivers, children and adolescents and the public, such as experiencing fear of the consequences of infection with a new virus, and triggering stigma. Those placed in quarantine (or self-isolated) may experience boredom, loneliness, and anger. By promoting flexible working arrangements such as adjusted working hours, working from home and/or support childcare, your employees will be in better position to address any childcare challenges and not be distracted by concerns about their children’s safety and wellbeing at home. Click here to view in English. Click here to view in Mongolian.
UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
- Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
- Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
- Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
- Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
- Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa Jamba, This email address is being protected from spambots. You need JavaScript enabled to view it.)
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION
Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.
Resources for information on Air Pollution
Specific ACTIONS that companies can take NOW:
Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees
- Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;
Work environment:
- Improve energy efficiency in building/office to reduce energy consumption;
- Plant & maintain trees; install air cleansing plants in the office;
- Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.com/mn/en/;
- Install monitoring devices;
- Smart Air Mongolia masks
Work activities:
- Ensure company vehicles are well maintained to reduce pollution emissions;
- Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
- Implement carpooling activities;
- In polluted air, ensure employees wear pollution masks;
Social responsibility:
- Focus CSR (corporate social responsibility) initiatives to tackle air pollution
- Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, This email address is being protected from spambots. You need JavaScript enabled to view it.; and Sunjidmaa, This email address is being protected from spambots. You need JavaScript enabled to view it.);
- Run marketing/PR campaigns & contests that raise awareness about air pollution.
List of distributors for pollution masks:
- BRB – 70119967, 99658555
- BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
- CATD LLC – 11327308, 99114346
- Mmarket – 75758001 – Facebook: Утааны Маск
- MONOS Pharmacy – 99190858
- Seven summits – 11317923
- 3M Mongolia Premier Service - 9400-3088, 9910-3335
- Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
- Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members - Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance. ECONOMIC INDICATORS
HISTORIC ANNUAL INFLATION
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015 *1.9% [source: NSOM]
Year 2016 *1.1% [source: NSOM]
Year 2017 *6.4% [source: NSOM]
Year 2018 *8.1% [source: NSOM]
Year 2019 *5.2% [source: NSOM]
Year 2020 *2.3% [source: NSOM]
Year 2019 *13.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2019 - 10.00% [source: Mongol Bank]
April 13, 2020 - 9.00% [source: Mongol Bank]
September 14, 2020 - 8.00% [source: Mongol Bank]
November 11, 2020 - 6.00% [source: Mongol Bank]
January 1, 2022 - 6.50% [source: Mongol Bank]
SOVEREIGN CREDIT RATING
| Moody’s |
Fitch |
S&P |
B3 – stable – 16 Mar 2021
B3 – negative – 8 May 2020
B3 – stable – 18 Jan 2018
Caa1 – stable – 30 Mar 2017
Caa1 – neg. watch – 15 Feb 2017
Caa1 – stable – 18 Nov 2016 |
B – stable – 9 Jul 2018
B- – positive – 17 Nov 2017
B- – stable – 22 Nov 2016
B – stable – 24 Nov 2015
B+ – negative – 13 Dec 2013 |
B – stable – 10 Nov 2018
B- – stable – 19 Aug 2016
B – stable – 03 Nov 2015
B+ – neg. – 29 Apr 2015 |
CURRENCY RATES – 1 June 2023
| Currency |
|
|
Rate |
| U.S. dollar |
USD |
|
3,447.50 |
| Euro |
EUR |
|
3,679.86 |
| Japanese yen |
JPY |
|
24.67 |
| British pound |
GBP |
|
4,261.63 |
| Hong Kong Dollar |
HKD |
|
440.14 |
| Russian ruble |
RUB |
|
42.63 |
| Chinese yuan |
CNY |
|
485.00 |
| South Korean won |
KRW |
|
2.60 |
|
